Ezra Cornell gave his farm, wealth and industry to establish Cornell University - New York State's land grant university. The little known story is his investment in 500,000 acres of land grant scrip in Northern Wisconsin – one of the most successful land speculation deals in US history – and the impact this had on the university, Wisconsin, and a small town on the banks of the Chippewa River – 900 miles from Ithaca, New York – that bears his name. Looks like I'm heading north.

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8.29.2010

14 Doing the Math: Cornell vs The Rest

How unusual was Cornell's land grant success? Because of the choice of the investment (valuable land with a marketable resource on the land) and the ability to hold on to the land long enough to realize significant appreciation, Cornell netted 1/3 of the nation's land grant proceeds while receiving 1/10 of the original land grant acreage.While some of the math is tough to confirm, before expenses it appears Cornell received $7.07 per granted (about half was invested in Wisconsin timberlands) acre while the rest of the (50+) institutions earned only $1.57 per acre. Cornell's top price is a documented $82 an acre).

Most of the other schools sold early or made less than ideal land acquisitions.
As Julia Roberts' character said in Pretty Woman: "Big mistake. Big. Huge. I have to go shopping now."

In January 1863, over significant local opposition from Confederate partisans and religious and other private educational interests, the Kentucky Legislature accepted the terms of the Morrill Land Grant Act for the State. The General Assembly promptly entrusted the management and sale of the 330,000-acre land "scrip" which it received, to a private financial firm-the Sinking Fund agency-with the intention of assuring the best possible price for the land. Madison Johnson, agent for the commissioners of the Sinking Fund, by inopportunely marketing the land scrip in 1866, realized only about $164,000-less than half the return which might have been anticipated a few years earlier, when federal land in Kentucky was selling at $1.25 per acre. The $9,900 return on the investment of the principal proved insufficient to allow for the growth of the new Agricultural and Mechanical College and its fulfilling the stipulations of the Morrill Act.

Brown University ($0.42/acre)
In January 1863 the Rhode Island legislature accepted the grant of 120,000 acres and transferred the land scrip to Brown University. In the summer of 1863 President Sears and Horace T. Love 1836 inspected the land, which was located in Kansas. The Corporation allowed only a small amount of money for the expenses involved in locating the land, paying taxes on it, and selling it, and the committee in charge of the matter of the agricultural lands found it easier to sell the land to Mr. Love for $50,000, payable without interest over five years. This expedient turned out to be a bad bargain when the value of the land increased.

University of Wisconsin ($0.58/acre)
This state's share was 240,000 acres. Several of the states used this fund to endow separate agricultural colleges, and there was some attempt made in Wisconsin to adopt this policy; but fortunately better counsels prevailed, and the College of Agriculture was by the reorganization act of 1866 made an integral part of the University, both being strengthened by the union.

By an act approved April 2, 1863, the legislature accepted from the federal government the Agricultural College grant of 240,000 acres, "upon the terms, conditions and restrictions" of the law, and the governor was directed to appoint two commissioners to select the lands. The entire amount was, in 1863-64, located in Chippewa, Clark, Dunn, Marathon, Oconto, Polk, and Shawano counties. We have seen that the first federal land-grant made to Wisconsin (in 1838) was for the benefit of the University, and consisted of two townships (46,080 acres). From their sale the State realized but $150,000; on the other hand Michigan obtained from a like grant over $500,000. We of this generation, who are being taxed to support our University, should clearly understand that it is a case where the penalty for the sins of the fathers is laid upon the sons.

Penn State University ($0.56/acre)
Penn State was founded in 1855 as a publicly supported agricultural college. It brought science to bear on age-old problems of food and fiber production.

In 1863, the Pennsylvania legislature designated Penn State the Commonwealth’s sole land-grant institution -- a distinction it still holds. Pennsylvania received 780,000 acres of land, which were sold for a total of $439,000. The state legislature then converted this amount to a $500,000 bond yielding 6 percent ($30,000) annually to Penn State. The bond functioned in effect as Penn State's "endowment" during those early years.

(These entries were often pulled verbatum from various Internet sources)